Tips to determine your best Travel Nurse Pay Package options
Many components make up a travel nurse’s pay package. When comparing pay packages, don’t just look at the numbers. Travel nurses should dig deeper to see what other benefits are provided. Those additional benefits and bonuses can result in thousands of realized dollars on each contract.
Whether you’re ready to take on your first contract in travel nursing—or perhaps you’ve been at it for a while—determining the best compensation package can be daunting. With so many variables and agencies making promising claims, it’s important to understand what will work best for you and your financial well-being. As part of our ongoing “Truth in Travel Nursing” series, The Gypsy Nurse team has compiled the following first key steps in what to look for in your travel nurse pay package.
Hourly Equivalent
Several factors impact the hourly rate offered for travel nursing assignments. These include:
- location: or the region and cost of living where the assignment is located
- nursing specialties
- timing: how quickly you can start the assignment
- even some general supply and demand factors
A travel nurse’s pay will generally consist of two main components:
- The regular, taxable hourly rate
- The non-taxable reimbursements for housing and meals/incidentals. These are also called stipends, subsidies, allowances, or per diems. These reimbursement payments are meant to cover meals and lodging costs resulting from the duplicate costs of living away from home for the job. Note that you will not receive a housing subsidy if you take company housing.
While sometimes the taxable hourly rate can seem low, agencies structure pay packages to be tax-efficient for the nurse. The less money that goes to a taxable hourly rate and the more that goes to the non-taxable subsidies, the better the net pay for the nurse. This cannot be very clear. Let’s look at some variables and what they may mean for your situation.
Take a Closer Look at Your Taxable Rate
The taxable hourly rate calculates several benefits should you need to use them. Unemployment, workers’ compensation, and disability payments are based on taxable income. Taxable earnings are also where social security contributions originate. Therefore, if you are nearing retirement, lower taxable earnings could significantly impact your future social security payments. In addition, if you need to borrow money for a home or auto loan, the lender will determine your loan amount qualifications from your taxable income.
Take a Closer Look at Non-Taxable Amounts:
Higher non-taxed reimbursements will make your net paycheck increase. At face value, this is appealing. However, it may not be quite that simple. The tax code allows tax-free stipends only while working away from one’s tax home. In many pay-package discussions, the aspect of “per diems” comes up. Here is some further information to help clarify:
You must be eligible for the tax-free per diems. Do you qualify?
There is a widespread myth that if you live (tax home) more than 50 miles away from your assignment, you are entitled to, eligible for, or guaranteed the per diems completely free of taxes. IRS Publication 463 states that you can accept tax-free stipends if “you need to sleep or rest to meet the demands of your work while away from home.” There are no guidelines, no specific distance given that would constitute your need to sleep or rest. Therefore, if a traveler prefers to drive 70 miles each way to work and back each shift, they do not qualify for tax-free lodging allowances. Why? Because they are commuting. Further, if you commute or are within a “commutable distance,” you don’t qualify. There are no duplicate lodging expenses to reimburse.
The Per Diem amounts
The General Services Administration (a federal government agency) sets GSA Per Diem Rates. These are “the maximum allowances federal employees are reimbursed for expenses incurred while on official travel.” Although designed for government employees, these rates are also applied by the IRS to private sector employees. The travel nurse industry uses these in determining per diem rates. Therefore, these reimbursements are paid free of taxes. Above all, you mustn’t assume you will be paid the exact current GSA table rates. Here are three GSA realities:
- GSA rates are the maximum amounts that can be reimbursed without the requirement to turn in receipts. There is NOT a requirement that these maximum amounts be paid out.
- GSA rates are based more on short-term hotel housing, which tends to be pricier than the longer-term housing used for a typical travel nurse assignment.
- Bill rates are what determine what travel pay and per diems will be. Very rarely is an agency bill rate high enough to pay out the GSA table maximum amount and retain a profit.
Stick with The Gypsy Nurse as we continue to evaluate additional factors that ultimately make up your compensation and your paycheck. We’ll continue to explore more benefits, total package value, guaranteed pay, low census protection, and more in our next article.
If you are a new travel nurse or looking into becoming a travel nurse:
Travel Nurse Guide: Step-by-Step (now offered in a PDF Downloadable version!)
